News from the New York State and Local Retirement System

Tag Archives: Payment Option

After months of planning and preparation, you’re ready to apply for retirement. To get your NYSLRS pension benefit, you need to send in an application. Let’s look at what you should include with the form to help make the retirement process go more smoothly.

Know your past employment. To help ensure you receive the proper credit for your public service, please list your public employment history. Include any military service and memberships in other New York public retirement systems.

Include your beneficiary’s information. You won’t make an official beneficiary designation with this form, but including these details will help us give you specific amounts for the pension payment options that offer a lifetime benefit for a beneficiary.

See a notary. The form must be filled out completely and signed by a notary public.

Proof of Birth

Make sure we have proof of your birth date. You can send it with your retirement application or before or after, but we cannot pay pension benefits without it. We accept photocopies of the following as proof:

Other Forms

Option Election

You’ll need to choose your pension payment option, or how you want your pension paid. Option election forms are available on our website, but we will also send you a form after we process your application. If you choose an option that provides your beneficiary a lifetime pension benefit when you die, you must provide proof of your beneficiary’s birth date.

Federal Income Tax Withholding

Your NYSLRS pension isn’t subject to New York State income tax, but it is subject to federal tax. You can fill out a W-4P form any time to tell us how much to withhold from your monthly benefit. We don’t withhold income tax for other states. Visit the Retired Public Employees Association’s website to see whether your benefit will be taxed in another state.

Direct Deposit

Direct deposit is the fastest and most secure way to receive your pension benefits. You can enroll in our direct deposit program when you file for retirement. Just fill out a Direct Deposit Enrollment Application (RS6370), and return it to us.

Domestic Relations Order

If an ex-spouse is entitled to part of your pension, you should send us a copy of your domestic relations order (DRO) as soon as possible. The DRO gives us specific instructions on how to divide your benefits. We cannot finalize your pension until we review it and calculate the court-mandated distribution of your benefit. For more detailed information, please read our Guide to Domestic Relations Orders.

When you retire, you need to decide how we’ll pay out your retirement benefit. You do that by choosing a pension payment option. Each payment option provides you with a monthly benefit for life. Nine of our payment options let you receive a smaller benefit so you can provide for a beneficiary when you die. There is also an option that pays you the largest amount of your benefit, but pays nothing to a beneficiary.

Filing Your Option Election Form

When you’ve decided which payment option you’d like, you need to file an option election form. You must file before the first day of the month following your retirement date. If you file on time, you have 30 days before you receive your first benefit payment to change your payment option. If you miss this deadline, we’re required by law to process your benefit based on the basic retirement benefit listed in your plan. (The Single Life Allowance (Option 0) is the basic retirement benefit for some plans, while the Cash Refund — Contributions (Option ½) is the basic retirement benefit for others. Check your retirement plan publication to see what your options are.)

What To Consider When Choosing A Payment Option

Choosing your payment option is a big decision. Once the 30-day deadline has passed, you can’t change your payment option. Here are some questions to ask yourself:

Do you want a payment made to one or more beneficiaries after your death?

Do you know about your beneficiary’s future income in retirement? Will your beneficiary receive their own pension? How much will they receive from Social Security benefits or other retirement savings accounts?

Do you have life insurance coverage? Life insurance payments could help your beneficiary make ends meet.

What are your financial obligations? Will your beneficiary have enough income to cover expenses if you die?

The answers to these questions can help you decide which option meets your needs. If you have any questions, email us from our website.

Would you like to read more NYSLRS Basics posts? Check out our earlier post on when you can retire.

Our Countdown to Retirement series highlights the steps you need to take as you approach your retirement date. This post focuses on the final three months.

Filing for Retirement

You must file your Application for Service Retirement (RS6037) with us 15–90 days before you plan to retire. You can get the form from our website or our consultation sites. Make sure to provide all the requested information and have it notarized.

If you send the form by “Certified Mail — Return Receipt Requested,” we will consider your application filed on the date it was mailed. Please don’t give your application to your employer; send it directly to NYSLRS.

Next Steps

Once we receive your application, we’ll mail you a confirmation letter. If you’ve received an estimate from us within the past 18 months, we will include three forms with the letter:

W-4P form (to choose the amount you want withheld from your pension benefit for federal taxes)

If you haven’t previously received an estimate, we will send you just the W-4P and Direct Deposit Enrollment forms, and we’ll begin processing your estimate. Once your estimate is complete, we will send it to you with the Option Election form.

Choosing Your Pension Payment Option

Select a payment option based on your most recent estimate, which shows what your pension benefit could be based on the pension payment options available to you. All of the options provide a monthly benefit for life, and some provide payments to a designated beneficiary when you die. You must file this form by the last day of the month in which you retire (unless otherwise notified).

Make Sure You’re Prepared

As your retirement date draws near, it’s important to understand the retirement process. Think about scheduling a consultation at one of our offices to file for retirement. Our information representatives can answer any questions to you have, help you complete the paperwork and notarize your retirement application. You can also contact us, if you have questions.